Lockheed Martin 2002 Annual Report Download - page 61

SIXTY-EIGHT
Lockheed Martin Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Federal and foreign income tax payments, net of refunds
received, were $55 million in 2002, $837 million in 2001 and
$249 million in 2000. Included in these amounts are tax pay-
ments related to the Corporation’s divestiture activities. In
addition, these amounts include net tax payments (refunds)
related to discontinued operations of $(22) million in 2002,
$179 million in 2001 and $(16) million in 2000.
The Corporation realized an income tax benefit of $140
million for 2002 as a result of exercises of employee stock
options. This benefit is recorded in stockholders’ equity under
the caption “Stock awards and options, and ESOP activity.”
NOTE 11—OTHER INCOME AND EXPENSES, NET
(In millions) 2002 2001 2000
Equity in earnings of
equity investees, net $93 $68 $48
Interest income 47 91 89
Write-down of
telecommunications investments (776) ——
Write-down of Space Imaging and
recognition of guarantee (163) ——
Write-off of investment in Astrolink —(367) —
Write-down of investment
in Loral Space —(361) —
Gain on sales of surplus real estate —111 28
Impairment loss related to
Americom Asia-Pacific —(100) —
Other charges related to the exit from
global telecommunications —(73) —
Early repayment of debt —(55) (146)
Loss related to the AES Transaction ——(598)
Gain on sale of Control Systems —— 302
Charge related to Globalstar guarantee ——(141)
Impairment loss on ACeS ——(117)
Other portfolio shaping activities and
other items, net 8(24) (20)
$(791) $(710) $(555)
NOTE 12—STOCKHOLDERS’ EQUITY AND RELATED ITEMS
Capital stock—At December 31, 2002, the authorized capital of
the Corporation was composed of 1.5 billion shares of common
stock (approximately 455 million shares issued), 50 million
shares of series preferred stock (no shares issued), and 20 mil-
lion shares of Series A Preferred Stock (no shares outstanding).
In October 2002, the Corporation announced that a new
share repurchase authority had been authorized which provides
for the repurchase of up to 23 million shares of its common
stock from time-to-time if market and business conditions
warrant. Under the authority, management has discretion to
determine whether to purchase shares, the number and price of
the shares to be repurchased, and the timing of any repur-
chases. The authority replaced a prior repurchase plan which
had been authorized in 1995. In the fourth quarter of 2002, the
Corporation repurchased 1 million common shares under the
authority for a total of $50 million.
Stock option and award plans—In March 1995, the stockholders
approved the Lockheed Martin 1995 Omnibus Performance
Award Plan (the Omnibus Plan). Under the Omnibus Plan,
employees of the Corporation may be granted stock-based
incentive awards, including options to purchase common
stock, stock appreciation rights, restricted stock or other stock-
based incentive awards. Employees may also be granted cash-
based incentive awards, such as performance units. These
awards may be granted either individually or in combination
with other awards. The Omnibus Plan requires that options to
purchase common stock have an exercise price of not less than
100% of the market value of the underlying stock on the date
of grant. The Omnibus Plan does not impose any minimum
vesting periods on options or other awards. The maximum
term of an option or any other award is 10 years. The Omnibus
Plan allows the Corporation to provide for financing of pur-
chases of its common stock, subject to certain conditions, by
interest-bearing notes payable to the Corporation.